John Kemp, an influential and respect market analyst for Reuters, has a provocative column out today expressing concern about well completions in North Dakota.
“No new well completion reports have been filed in North Dakota since July 10, the longest gap this year, according to daily activity records published by the state’s Department of Mineral Resources (DMR),” he writes. “Completions, rather than wells drilled, provide the best guide to short-term changes in output, since operators can always delay completing a well and putting it into production, either because they are waiting for completion crews to be available or to wait for better prices.”
North Dakota oil production through May (the last month for which official numbers are available) has proved surprisingly resilient despite on-going low oil prices and falling rig counts as this graph illustrates…
…and everybody seems to be waiting for the other shoe to drop. So news that well completions have seemingly fallen off a cliff is, well, big news.
Except, they haven’t really. I spoke with Alison Ritter, spokeswoman for the Department of Mineral Resources, and she told me there was a much less sexy explanation for the absence of well completions in recent reports.
The guy who handles those reports has been on vacation.
He’s back on the job now. Ritter tells me when she ran the report yesterday there were 28 completions that hadn’t yet been reported.
She said that Kemp didn’t contact their office before publishing his column.
In Kemp’s defense, he did add this at the end of his column: “It is possible that operators will file a sudden rush of completion forms in the next few days, but unless they do, it looks like the pace of completions may be slowing substantially.”